EVAN DAVIS: Just to be absolutely clear, if you strip out all of the accounting changes, the Royal Mail, post, the different treatment of banks, the asset purchase facility, all those things, if you take those out and you take out the 4G license, borrowing would actually go up this year? It’s a simple, simple question, and I am asking you if that’s the case or not.

GEORGE OSBORNE: Well, I just don’t think you can strip out...

DAVIS: It’s extraordinary you can’t answer.

OSBORNE: I am sorry, I am answering your question, it’s not that I am not answering it, it’s like saying if we went ahead with the fuel duty rise in January, which is the same month that the 4G receipts are scored, well what would happen then?

DAVIS: Well that would be a perfectly reasonable question but I didn’t choose to ask it.

OSBORNE: Or, indeed, what happens if we do or don’t go ahead with the big increase in investment allowances.

DAVIS: Another interesting question which I didn’t choose to ask.

OSBORNE: I would say the money we get from the 4G receipts, which is an independent number, that money enables us in the round, with all the other things going on, to help small businesses to help fund capital investment, for example in further education colleges and schools. So it’s all part of a whole... what I am saying is that it’s a pretty desperate attempt...

DAVIS: Well it’s not a desperate attempt.

OSBORNE: I’m sorry, I’m sorry, as you know this is what the Labour Party put out to try and explain the fact that they put out for weeks in advance saying that the deficit was going up when in fact the deficit is coming down.

DAVIS: Mr Osborne, everyone was surprised, the Labour Party was surprised, the Institute for Fiscal Studies was surprised, a lot of people, I was surprised, people covering it on telly were surprised, everyone was surprised. I will ask you another very simple question, is the cut in borrowing, when you strip out the one-off factors, apart from the 4G license, is the cut in borrowing less than £3.5billion?

OSBORNE: Well it depends on...

DAVIS: We’re wasting our time giving us a non-answer, let’s move on.

OSBORNE: I’m sorry, you can’t just ask these questions and before you even allow me to answer...

DAVIS: Well it’s a factual question, you are clearly unable to answer, so let’s move on. Come on, let’s not waste time.

OSBORNE: Can I just answer your question? Let me answer it like this. There are four different ways you can present our numbers, it’s all been done independently, some of it includes things like selling the Royal Mail pension fund, some of it involves a transfer of the QE coupons, there are lots of different ways [an audible sigh is made in the background] of presenting the numbers, every single different version of presenting those numbers audited independently shows that, yes, we are making progress.The deficit has come down by a quarter, it is continuing to fall, of course it’s still far too high and I want to do more to get it down but we are making progress... [the interview continues to discuss the deficit and Mr Osborne ends a subsequent point with...] We are being completely transparent.

DAVIS: You were transparent and I was defending your transparency until the first answer of this interview in which you just refused to say the simple thing, which is it would have been going up, borrowing this year. You chose not to answer it.